n December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $738,400 of overhead costs and $520,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56. 1. What is the predetermined overhead rate for year 2015? n December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $738,400 of overhead costs and $520,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56. 1. What is the predetermined overhead rate for year 2015?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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n December 2014, Shire Computer’s management establishes the 2015 predetermined |
| 1. | What is the predetermined overhead rate for year 2015? |
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n December 2014, Shire Computer’s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $738,400 of overhead costs and $520,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56. |
| 1. | What is the predetermined overhead rate for year 2015? |
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